Category Archives: Real Estate

Fannie Mae New Loan-to-Value Ceiling for Home Affordable Refinance Program

fannie-mae-building
Fannie Mae (FNM/NYSE) announced today that the company is providing information to servicers regarding changes to the Home Affordable Refinance Program (HARP) that permits refinancing of existing Fannie Mae loans with loan-to-value (LTV) ratios up to 125 percent. The loans will be eligible for delivery on or after September 1, 2009.

“This step aims to reach even more borrowers who would benefit from a lower payment,” said Michael J. Williams, President and Chief Executive Officer. “Many borrowers in good standing have been shut out from the benefits of refinancing due to significant declines in property values across the country. By broadening the scope of the initiative, more borrowers will experience savings on their monthly mortgage payments and have a better chance of sustaining homeownership over the long term.”

Previously, HARP allowed for refinancing of Fannie Mae loans with LTVs up to 105 percent. With the expansion, loans with LTVs above 105 percent and up to 125 percent will be eligible for refinancing through the company’s Refi Plus™ manual underwriting option. For loans with LTVs above 105 percent, borrowers must refinance through their existing servicer and the new loans must be fully amortizing fixed-rate mortgages with terms greater than 15 years up to 30 years.

In conjunction with the LTV eligibility expansion, Fannie Mae will offer a special .50 percent reduction in the loan-level price adjustment charged for loans with LTVs above 105 percent and loan terms of 20 and 25 years. The reduction is intended to incent borrowers to select shorter terms and build positive equity in their homes sooner than with a typical 30-year mortgage.

HARP is part of the Administration’s Making Home Affordable plan aimed at stabilizing the housing market, helping Americans reduce their mortgage payments to more affordable levels, and preventing avoidable foreclosures. For more information, visit Making Home Affordable.gov

Value of Home Goes Down, Home Owners Walk Away

foreclosed-home

A study of the Massachusetts housing market by researchers from Northwestern University and the University of Chicago concludes that a home owner’s propensity to default increases the further their loan goes under water.

The study found that home owners begin to walk away after declines of 15 percent or more. More than 17 percent of households would default, even if they can afford to pay their mortgage, when the equity shortfall reaches 50 percent of the value of the house.

The researchers found:
• People under the age of 35 and over the age of 65 are less likely to say it is morally wrong to default compared to middle-aged respondents.

• People with a higher education (8 percentage points) and African-Americans (14 percentage points) are less likely to think it is morally wrong to default, whereas respondents with a higher income are more likely to think it is morally wrong.

• Default is considered less morally wrong in the Northeast (6 percentage points) and West (8 1/2 percentage points).

• There was little difference in the moral view of strategic default among Republicans and Democrats, but independents are less likely to say defaulting is immoral.

• Respondents who supported government intervention to help homeowners were 12 percentage points less likely to say strategic default is immoral.

So what do you think, is it OK to walk away if you are still able to make your monthly payments on your mortgage?

FTC Cracks Down on Real Estate Con-Artists

mouse-scammer

I was wondering when the Fed’s were going to crack down on con artists which advertise get rich quick schemes in real estate. The con artists offer to make you rich by using their “proven techniques in real estate”

These con artists also offer help on repairing their credit, landing new jobs, starting lucrative work-at-home businesses and obtaining government money to pay off bills. Surging like the unemployment rate, scams, touted on Web sites and infomercials, have bilked consumers out of hundreds of millions of dollars, according to the Federal Trade Commission.

Last Wednesday the FTC, working with local authorities across the country struck back and filed criminal charges against many of the scammers.

According to the Chicago Tribune

“The (FTC) announced a series of civil and criminal charges against alleged con artists who have preyed on economic anxiety to lure consumers into making upfront payments for services that either fall far short of the promises or never materialize.

“To con artists, today’s challenging economy presents an opportunity to exploit consumers’ fears and bilk them out of money,” said David Vladeck, director of the Federal Trade Commission’s Bureau of Consumer Protection.

Vladeck said that more than 100 cases have been filed nationwide this year as part of Operation Short Change, a task force consisting of the FTC, the Justice Department and officials in 13 states and the District of Columbia. The cases included eight filed Wednesday by the FTC.

One of the new cases alleged that five California companies bilked hundreds of thousands of consumers nationally out of about $300 million by offering fraudulent programs related to real estate or online businesses.

The companies — John Beck’s Amazing Profits, John Alexander LLC, Jeff Paul LLC, Mentoring of America and Family Products — and five people who founded or run them were accused of violating federal laws related to telemarketing and consumer fraud.

The FTC accuses the companies of making “false and unsubstantiated claims about potential earnings” customers could make by following their advice in books, DVDs and CDs titled “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days” and “Jeff Paul’s Shortcuts to Internet Millions,” which sold for $39.95 each.

People who purchased the programs unknowingly were signed up for additional monthly charges of $39.95. Messages left with the companies were not returned Wednesday.”

I did a Google search and John Beck’s site is still up and running, ready to take your money and help him get rich.

Victoria Gotti Home in Foreclosure

victoria-gotti

The bank has started foreclosure proceedings on Victoria Gotti, daughter of the infamous John Gottie, palatial estate on Long Island — the same used in the TV reality show “Growing Up Gotti” — saying she owes a whopping $650,000 in mortgage payments, according to court papers filed recently.

Gotti’s lender, JP Morgan Chase, claims the daughter of the late Gambino crime family boss John “Dapper Don” Gotti — owes them that staggering amount after she failed to make payments starting in September 2006, court records reveal.

The bank said in court records that the mafia princess owed them $25,000 a month in mortgage payments.

The home, which Gotti once tried to sell at $4.8 million but lowered once she put it on the market this past January for $3.2 million, became known to TV viewers across the country after A&E filmed the reality show, “Growing Up Gotti” there in 2004 and 2005.

From August 2004 until December 2005, she was the star of Growing Up Gotti, an American reality television on the A&E Network. The show, which was short lived, also featured her three sons. The Smoking Gun launched a parody of sorts entitled Blowing Up Gotti, which consisted of family visits to John Gotti while he was in prison that prison officials routinely taped.

A&E faced exceptional criticism for the show. Some viewers complained that A&E was showcasing a family living in luxury that was purchased by blood money made by her father, John Gotti. They felt the network was glorifying organized crime. Many have also complained about the foul language used on the show, as well as the dysfunctional relationship between Victoria Gotti and her sons. Film.com said about the show: “Victoria Gotti has the warmth of an ice pick and her sons the charm of, well, thugs.”

Home Buyer Tax Credit Expained

httpv://www.youtube.com/watch?v=qeDp_w3oiqg

Robert Dietz, tax economist, of the National Association of Home Builders gives detailed answers to questions home buyers might have about the Federal tax credit. (The $10,000 California tax credit for home buyers has been used up)
Some of the questions answered are:

• Who’s eligible to claim the credit?
• How does it help you?
• What kind of homes qualify?
• How is the amount of credit determined?
• What is a partial credit?
• When can you claim the refund?
• How is the 2009 credit different from the 2008 tax credit?

Additional information about the tax credit can be found on the Federal Housing Tax Credit website.

Steve Wynn Lists his Apartment for $25,000,000

stevewynn
The legally blind billionaire, Steve Wynn has put his 3,500 square foot apartment on the market for a paltry sum of $25,000,000. With 2 bedrooms, 3.5 bathrooms, master bedroom, formal dining room and library, with a re-design that created two luxurious his and her bathrooms.

Located on the seventh floor on Fifth Avenue, they bought it in 2001 for about $7,000,000. They must think that real estate values have increased more than three fold since they bought it. It’s too bad that the Las Vegas based casino king Steve Wynn may soon be divorcing his wife Elaine and has found someone else.

Previous reports reveal that in July of 2005 the Wynn’s sold their 12,162 square foot mansion located on 4.6 acres in the Shadow Creek Golf Course for around $15,500,000 and then bought a private villa at the Wynn Las Vegas. However, there are six private villas at the Wynn Las Vegas not available to the public and recent reports indicate one is undergoing a renovation. Thought on that is that Steve Wynn is having it being remodeled for his new home.

Six Ways to Expedite Sale of Your Home

sold-sign

Selling a home fast in today’s market is somewhat of a challenge. Here are six ways to expedite a sale.

1. Cut the asking price to 10 percent to 15 percent below what comparable properties in the neighborhood are selling for. Pricing your home at current market price in a declining market is almost a guarantee that your home will not sell.

2. Spruce up the outside. First impressions, like a first date, make or break a sale. Update the landscaping. Power-wash the exterior and paint the door.

3. Spruce up the inside. Store all your nick-knacks. Get rid any clutter, make the inside a model home. Stage the home so people coming to view your home can make their own impression of the home, not your motifs. Examples, updated light fixtures and carpet, current paint colors, slipcovers for dated furniture.

4. Appeal to first-time buyers. Advertise on younger consumers’ favorite Web sites, such as Facebook and Twitter. Hire a photographer to shoot the house with a wide-angle lens so the rooms look bigger in online photos. We offer this service to all of our clients free of charge, including taking a video of your home to go onto YouTube and post your home on 32 websites.

5. Price the house in the lower end of the range. A $299,000 house is in the high end of the $250,000 to $300,000 range but a $301,000 home is in the low-end of the $300,000 to $400,000 range.

6. Do what you can to make the deal close quickly. Be ready to move, offer to pay part of the closing costs, and/or throw in a year’s worth of association fees.

What has been your experience in selling a home quickly? Let me know.

Canadians Largest Foreign Real Estate Investors in U.S.

canadian-flag
The Canadian’s have increased their investment in the United States from 11 percent in 2007 to 23.5 percent in 2008, making Canada the largest foreign real estate investor in the U.S. according to the National Association of Realtors®

The strong attraction for the Canadians is that the Canadian “loonie” is at par with the U.S. dollar for the first time since 1976, making this the best exchange rate in more than thirty years. So with property values having fallen so plummeted in the U.S. it is a perfect time to buy.

According to the The Sierra Vista Herald

“The double whammy of falling U.S. real estate prices and a rising Canadian loonie has created a once-in-a-lifetime bargain for Canadians looking for property in the U.S. Sunbelt,” said Bank of Montreal Chief Economist Sherry Cooper. “I love the Canadian dollar at parity. We are truly richer, as the money we earn and the money we invest is worth more.”

“When (the Canadian dollar) hit a dollar ten, it really created a real buzz for Canadians, not only those looking to buy second homes, but we’re also seeing it from buying purely from an investment standpoint,” he said.

The National Association of Realtors reports that 64.4 percent of Canadian buyers plan to use their U.S. homes for vacation purposes.

On average, foreign purchasers plan to stay in their U.S. property 2.6 months of the year. A third intends to use their U.S. home a total of three to six months.

LaVoie, sums it up, “Foreign investment has an undeniable presence in the U.S. real estate market, especially here in Arizona. Opportunities are abundant. Now is the time to buy and our Canadian friends clearly recognize this. For them, this is the most opportune time to invest.”

I think if you have the money, it’s a buying opportunity of a lifetime. Do you think it’s a good time to buy real estate?

Craigslist Rental Scam II

Paul Salamone
Paul Salamone

Home may be a man’s castle, but in Paul Salamone’s case, the entire fiefdom was allegedly fraudulent.

The Medford man is facing a Suffolk County, Long Island, jury this week after being accused of breaking into seven homes in various states of foreclosure and illegally renting some of them out in a scheme to capitalize on the failing local housing market. In his defense, his attorney points out that 28-year-old Salamone, who prosecutors say had renovated some of the vacant houses before he advertised them as for rent on Craigslist, truly believes what he was doing was right. Despite Salamone’s supposed good intentions, at least two families that rented from him were caught in the crossfire and evicted after the alleged scam began to unravel.

Accused felon Paul Salamone is charged with renting foreclosed homes he didn’t own.

“Confusion and misunderstanding, not guns or knives, were Mr. Salamone’s weapons,” said Marc Lindemann, the assistant district attorney who is prosecuting the case, in his opening statements at Suffolk County court in Riverhead on June 22.

Salamone allegedly told realtors that they no longer had ownership of the houses and backed his argument with what Lindemann described as official-looking documents. But many of the houses were actually owned by Deutsche Bank, said Lindemann, a prosecutor with the Suffolk District Attorney’s Office’s Economic Crimes Bureau.

It took police several months to connect the dots. A grand jury had indicted Salamone on five counts of burglary, but two more counts were added when additional houses were discovered. He was also charged with grand larceny for the “rent” he received, and criminal possession of a forged instrument for filing more than a dozen fraudulent liens.
Salamone’s attorney, Eric Naiburg, admits that his client made a serious mistake, but insists he is not a crook.

“He had no right to be in these houses,” the Smithtown-based attorney said in his opening statement. “That is conceded. That he went into these houses with the intent to commit a crime, that is not conceded, not conceded at all.”

“If this was a scheme, it was dumb,” Naiburg said, adding that if Salamone was trying to scam people, as prosecutors allege, then “he is the worst scam artist this nation has ever seen.”

Source: The Long Island Press

What do you think of the defense attorneys statement? Salamone rented the homes out that wasn’t his, but Salamone did not intend to commit a crime? Huh?

Senior Citizens Kidnap, Torture Their Financial Advisor

Two of the kidnapping suspects
Two of the kidnapping suspects

So we have financial advisors who steal money in this country and wait for the wheels of justice to turn to punish them. But some senior citizens in Germany had what they thought was a better approach to punish and get their money back at the same time.

The good senior citizens ambushed James Amburn, 56 outside his home in Speyer, Western Germany, bound him with duct tape and bundled him into a car trunk.

Amburn was than driven 300 miles to the Bavarian lakeside home of one of the gang. As the financial advisor Amburn, who runs investment firm Digitalglobalnet, was taken to the cellar another couple, retired doctors, joined the kidnappers in the cellar where Mr. Amburn was chained and tortured for four days last week.

The reason for all of the anger from the good citizens was that the financial advisor has lost the equivalent of $3.3 million of their money. It seems that their money was supposed to have been invested in Florida real estate, which of course was lost completely.

Mr Amburn said: ‘I had known these people for 25 years. I had no reason to be afraid. But as I went into my home I was jumped from the rear and struck.

‘They bound me with masking tape until I looked like a mummy. It took them quite a while because they ran out of breath. When they loaded me into the car I thought I was a dead man.

‘I was bleeding from my eyes, nose and my mouth. But the nightmare had only just started.’

During his confinement in an unheated cellar, Mr Amburn claims he was burned with cigarettes, beaten, had two of his ribs broken when he was hit with a chair leg and chained up ‘like an animal.’

He says he was fed only two bowls of watery soup during his four days in the dungeon.
He was rescued when he convinced his captors that he had money in a Switzerland bank that could be transferred to them if they allowed him to fax a note to the bank. They agreed to let him send the fax, but unknown to the seniors he scribbled a note at the bottom of the fax to call the police.

Shortly afterwards, the Swiss bank telephoned police in Germany and an armed team of special SEK commandos was scrambled and the house was stormed in the early hours of Saturday morning.

An ambulance with a doctor had to be called not only for Mr. Amburn, but also for the senior citizens because of their infirmities. How about that!

Chief public prosecutor Volker Ziegler said: ‘They were angry because they invested money in properties in Florida and he lost it all.

‘This was black money – they hadn’t declared it to the revenue authorities in Germany.’

Mr. Amburn is recovering from cigarette burns, broken ribs, threats of being killed by the Mafia. The seniors are facing 15 years in jail for kidnapping, torture and tax evasion.

Finally what do you think of this vigilantism? Do you condone their actions?